Feb
13

Are Any of the “Top” Apartment Markets in the Carolinas?

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What makes an apartment market a “top” market?

Is it single-digit vacancy rates and double-digit rental rate growth? Can investors simply look at the most recent data from industry researcher Axiometrics Inc. and make their decisions based on numbers alone? If they do, they might end up investing in markets that are performing well today but lack any future growth prospects.

Or should investors take their cue from Wall Street and stick to the coastal markets—the so-called Sexy Six that regularly attract institutional investors? In doing so, investors might end up competing with every other investor and paying cap rates below 4 percent for assets that have little or no upside.

“You don’t want to confuse rent growth, occupancy or architectural attractiveness with the top markets for investments,” warns Jeffrey Friedman, chairman, president and CEO of Associated Estates Realty Corp., a Richmond Heights, Ohio–based apartment REIT with a portfolio of 52 properties containing 13,950 units in 10 states.

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